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Here is the text from the Federal 2007 Budget webpage regarding child care:
Supporting the Creation of New Child Care Spaces
In Budget 2006, Canada’s New Government introduced the Universal Child Care Plan, a two-pronged strategy to provide support for families with children. In July 2006, parents began receiving support of $100 per month for every child under age 6, to be used for the priorities identified by parents as they determine how best to balance home, work and other commitments. Recognizing that parents often choose to use child care services, the Government also committed to provide $250 million annually to support the creation of up to 25,000 new spaces beginning in 2007–08.
Building on consultations with other governments and service providers, the Government is delivering on this commitment in Budget 2007.
Budget 2007 proposes to provide a 25-per-cent investment tax credit to businesses that create new child care spaces in the workplace to a maximum of $10,000 per space created. It also proposes to provide annual additional funding of $250 million to provinces and territories to support the creation of child care spaces that are responsive to the needs of parents, and are administered in an efficient and accountable manner. This funding will continue to grow over time as a result of the annual 3-per-cent escalator that is part of the renewed CST.
Funding will flow through the CST, beginning in 2008–09, upon completion of discussions with provinces and territories on how best to make use of those new investments and to ensure reporting and accountability to Canadians. While these discussions are ongoing and to fully honour the commitment made in Budget 2006, Budget 2007 provides a transition payment to provinces and territories of $250 million for 2007–08 to support the child care spaces objective, allocated on an equal per capita basis.
Moreover, Budget 2007 announces the extension of existing funding of $850 million, provided within the CST in support of federal-provincial-territorial arrangements established in 2000 and 2003 for early childhood development and early learning and child care. These federal funding arrangements will be extended to 2013–14.
These actions will increase support for children through the CST to $1.1 billion in 2008–09. This support will grow to almost $1.3 billion by 2013–14.
This transfer to provinces and territories is only one way that the federal government provides support for children.
|Federal Support for Early Learning and Child Care The Government of Canada will provide nearly $5.6 billion in 2007–08 in support of early learning and child care through transfers, direct spending and tax measures:
Budget 2007 proposes to introduce a tax credit to encourage businesses to create licensed child care spaces for the children of their employees and, potentially, for children in the surrounding community. The tax credit, which will be delivered as part of the existing investment tax credit provisions, will be available to eligible businesses that create one or more new child care spaces in a new or existing licensed child care facility.
The measure will provide eligible taxpayers with a non-refundable investment tax credit equal to 25 per cent of eligible expenditures, to a maximum credit of $10,000 per child care space created. Taxpayers eligible for this new credit will be those that carry on a business in Canada. Further, the provision of child care spaces must be ancillary to one or more businesses of the taxpayer that do not include the provision of such spaces.
Eligible expenditures will include the cost of depreciable property (other than specified property) and the amount of specified start-up costs, acquired or incurred solely for the purpose of the creation of the new child care space at a licensed child care facility.
Eligible depreciable property will include the cost or incremental cost of the building or portion of the building in which the child care facility is located, as well as the cost of furniture, appliances, computer equipment, audio-visual equipment, playground structures and playground equipment. The specified start-up costs will include initial start-up costs such as landscaping costs for the children’s playground, architect’s fees, costs of initial regulatory inspections, initial licensing fees, building permit costs and costs to acquire children’s educational material.
Eligible expenditures will not include specified property. Specified property will include motor vehicles and property that is, or is located in or is attached to, a residence of the employer, of an employee of the employer, of a person who holds an interest in the employer, or of any person related to the employer. The credit will not be available for any of the ongoing or operating expenses of the child care facility such as supplies, wages, salaries, utilities, etc.
Unused credits may be carried back 3 years and forward 20 years by eligible taxpayers to reduce federal income taxes otherwise payable in those years. All or part of the credit arising in respect of the cost of the acquired property upon which a taxpayer’s credit is computed will be recaptured in certain circumstances. The credit will be recovered against the investment tax credit balance if, at any time within the five calendar years after the creation of the new child care space, the new child care space ceases to be available or property that was an eligible expenditure in respect of the child care space is sold, or leased, to another person or is converted to another use.
The amount to be recaptured will be 25 per cent of the lesser of
· the eligible expenditure that was taken into account in determining the credit, and
· the proceeds of disposition of the eligible property or, if the eligible property is disposed of to a related party, the fair market value of the property at the time of the disposition.
If the application of the recapture rule results in an investment tax credit balance at the end of a taxation year being less than zero, the taxpayer will be required to add the negative balance to tax payable.
The tax credit will be available in respect of eligible expenditures that are incurred on or after March 19, 2007.
Investment Tax Credit for Child Care Spaces
(39) That, for taxation years that end on or after March 19, 2007, a taxpayer carrying on a business in Canada, other than a business that is the provision of child care services, be allowed to add, in computing its investment tax credit at the end of the taxation year, an amount incurred on or after March 19, 2007 in respect of the creation of each new child care space in a licensed child care facility, equal to the lesser of $10,000 and 25 per cent of the taxpayer’s eligible expenditures in respect of the child care space.
(40) That, for the purpose of paragraph (39),
(a) an eligible expenditure be an expenditure, incurred for the sole purpose of the creation of the new child care space in a licensed child care facility operated for the benefit of children of the employees of the taxpayer, or of children of the employees and other children, that is
(i) incurred to acquire depreciable property of a prescribed class (other than a specified property), or
(ii) a specified child care start-up cost;
(b) a specified property be a property that is a motor vehicle or a property that is, or is located in or attached to, a residence of
(i) the taxpayer,
(ii) an employee of the taxpayer,
(iii) a person who holds an interest in the taxpayer, or
(iv) a person related to a person referred to in any of clauses (i) to (iii); and
(c) a specified child care start-up cost be the cost (other than the cost of a property included in clause (a)(i)) of
(i) landscaping to create an outdoor play area for children,
(ii) initial fees for licensing, regulatory and building permits,
(iii) architectural fees for designing the child care facility, and
(iv) children’s educational material.
(41) That, if in a specified taxation year in respect of a property the cost of which included one or more eligible expenditures of a taxpayer in respect of a child care space, the taxpayer disposes of the property, or the child care space ceases to be available, there be added to the taxpayer’s tax otherwise payable under Part I of the Act for the specified taxation year, an amount that is 25 per cent of the lesser of
(a) that portion of the cost of the property that was an eligible expenditure that was taken into account in computing the investment tax credit; and
(b) the amount that is
(i) if the property is disposed of to a person with whom the taxpayer deals at arm’s length, the proceeds of disposition of the property, and
(ii) in any other case, the fair market value of the property.
(42) That, for the purposes of paragraph (41),
(a) a disposition of a property include a lease of the property by the taxpayer, or a change of use of the property to a non-specified use (being any use other than the provision of child care services); and
(b) a specified taxation year in respect of a property be a taxation year that ends on or before the day that is 60 months after the day on which the taxpayer acquired the property.
A few new things have happened in BC regarding funding for child care programs and services. Click here to read the latest letter from Minister Reid. There are still many concerning things that are happening however. Provincial funding to Westcoast Child Care Resource Centre is being eliminated. While some funding is being restored for CCRR’s, this is still greatly reduced. The Child Care Operating Funding is still being reduced approximately 27% as of July 1, 2007. There is still a funding cap on for any new child care spaces that are developed.
Let the government know that child care is important to BC families.
- Honourable Linda Reid, the Minister of State for Child Care
E-mail: firstname.lastname@example.org Tel: 250-356-7662
- Honourable Tom Christensen, the Minister of Children and Family Development
E-mail: email@example.com Tel: 250-387-9699
- Premier Gordon Campbell
E-mail: firstname.lastname@example.org Tel: 250-387-1715
On January 5, 2007 BC’s Minister of State for Child Care released a letter to the child care community announcing her Ministry’s response to the formal end of BC’s Early Learning and ChildCare Agreement with the Federal Government. The Federal Government have chosen to end this agreement with each of the Provinces and Territories effective March 31, 2007and instead offer the Universal Child Care Plan.
In the days that have passed since the Minister’s letter was first released it seems that the child care community in BC has been turned upside down. The cuts that have been announced will have SIGNIFICANT impacts on all child care programs and services throughout the Province. Child care providers (Family and group) are being faced with very challenging questions. Raise fees? Lose staff? Reduce staff wages? Close the doors? The reality is that in BC, as in other areas of the Country, our child care programs have a difficult time sustaining themselves while still being reasonably affordable for families. Programs like the Child Care Operating Funding Program go a long way toward making the fees more affordable while also helping to pay child care providers and Early Childhood Educators better wages. Any amount of reduction to this program will have a dramatic impact on the already fragile system. Further, programs such as the Child Care Resource and Referral services that support child care providers throughout the Province and help parents to find child care in their community appear to be being reduced to the point of total elimination. The CCRR’s are one of the key networks that help both child care providers and parents. In my mind they do a lot to enhance the quality of child care we have available in BC. If they are eliminated, I fear what it will mean for the future of child care in our Province.
So I am, like so many people in BC and in Canada, shaking my head. I just don’t get it.
- I don’t get how paying parents $100 per month for each child under six years will help solve our child care problem in this Country. Hmmm, that doesn’t even begin to cover the deposit that most people have to pay just to try and secure a space for their child.
- I don’t get how BC didn’t take more of a stand against the Federal Goverment when the Early Learning and Child Care Agreements were being dismantled.
- I don’t get how Minister Reid (or the BC Government) can make the kind of cuts they have to child care when we have such a strong economy in our Province.
- I don’t get how creating up to 25,000 new child care spaces per year in Canada beginning in 2007(under the Universal Child Care Program) will really happen when the system can’t afford to sustain the spaces and parents can hardly afford to pay for them.
- I don’t get how parents are going to afford what may be an average fee increase of $50 – $75 per child per month in child care programs. This is the average amount that child care providers in BC are indicating that fees will need to go up to adress the funding shortfall they will experience when the funding cuts happen.
Of course, like many others, I will let it be known that none of this makes any sense for child care, for families or for children. However, also like so many others, I will still be left shaking my head – wondering what the “powers that be” could possibly have been thinking in Victoria and Ottawa.
Sorry, but I just don’t get it.
On April 28, British Columbia and Alberta signed the British Columbia – Alberta Trade, Investment, and Labour Mobility Agreement (TILMA) at the 4th annual joint British Columbia – Alberta Cabinet meeting in Edmonton.
British Columbia and Alberta businesses and workers will enjoy new market access. This innovative agreement gives businesses and workers in both provinces seamless access to a larger range of opportunities across all sectors including energy, transportation, labour mobility, business registration, and government procurement.
Earlier this year I became very interested in what the impact of this agreement will be on Early Childhood Educators in both BC and Alberta. I consulted the BC Ministry of Economic development to better understand if Early Childhood Educators would be included in the list of professions that are being covered by this agreement. After some delays, I was recently advised that “Yes they will be added to the list”. I actually think that this is a fascinating development for the child care field in Canada and that it will have major implications regarding the mobilty of workers between our two Provinces. Surprisingly though, it seems that very few people in the child care field seem to be aware of this interesting development.